My financial priorities include saving for a new car, investing in new drum equipment, and updating my landscaping tools. I value security over adventure and tend to spend extra money on upgrading my possessions or saving for the future.
Short-term goal: Save $500 for a new drum set
Mid-term goal: Save $2000 for a down payment on a car
Long-term goal: Save $5000 for landscaping equipment
I have chosen a budget template that includes sections for monthly income, fixed expenses, and variable expenses.
My monthly income is estimated to be $3000, coming from my job as a car dealer and gigs as a drummer.
My fixed expenses total $1500, including rent, utilities, and car insurance.
My variable expenses are estimated at $800 for groceries, gas, entertainment, and other miscellaneous items.
After totaling my income and expenses, I am under budget by $700 each month. This extra money can be put towards my savings goals for a new drum set, car, and landscaping equipment. I will continue to track my spending and look for ways to cut back on non-essential expenses to further increase my savings.
Step 1: My goals is being a car dealer and great drummer and landscaper
On a word processing document, make a list of your financial priorities. Do you value new things over outdated things? Do you value security over adventure? What do you spend money on when you have extra money? The more specific you can be about your priorities, the easier it will be to set financial goals.
Make a list of your short-term, mid-term, or long-term goals. Are you saving for a particular event, like a vacation, or are you putting money aside for an early retirement?
Step 2: Research and Choose a Budget Format
Conduct an online search for personal budget templates. You’ll find a lot of results, including spreadsheet and document templates and images of various budget formats.
From your research, choose a template that organizes the information. Be sure to have it include space for your monthly income, monthly fixed expenses and monthly variable expenses.
Step 3: Calculate Your Monthly Income
Using relevant bills, invoices, receipts, bank statements, and other financial records from the past three months, estimate your monthly income.
For each source of income, add a new line item under the monthly income section.
Step 4: Calculate Your Monthly Expenses
Using the relevant financial information, enter the estimated amounts for your fixed expenses. For each fixed expense, add a new line item under the monthly expense section.
Repeat this step with your variable expenses. Note that with estimating variable expenses, you should be conservative and avoid using overly optimistic figures.
Step 4: Complete Your Budget
Total your income and expense lists.
Create summary portion on your budget template. Subtract your monthly expenses from your monthly income.
Note if you are over or under budget each month.
If you are over budget, you should begin to think about ways to cut discretionary (or variable) spending and even consider renegotiating some of your fixed expenses.
If you are under budget, think about ways to save.
Document on the word processing document if you are over or under budget and write two to three sentences describing how you can respond to this information.
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